The only 2 rewards cards you really need

Tuesday

Oct 8, 2013 at 6:00 AM

One card is good, but two is better if you want the most money back from your credit card purchases.

In August, Consumer Reports Money Adviser applied that hypothesis to more than 60 rewards card programs using a variety of spending scenarios based, in part, on Bureau of Labor Statistics consumer spending data and market research. It turns out that spreading the right purchases across the right two cards can earn you hundreds of dollars more in annual rewards than just one card.

Here are the best two cards for three different types of spenders.

The full house

Your family spends about $3,900 on gas and $5,700 on groceries a year, the national average for a couple with children, according to the Bureau of Labor Statistics. On a credit card budget of $3,000 a month, you're also spending heavily on entertainment, clothes and utilities.

Your two best cards: American Express Blue Cash Preferred and Fidelity Rewards American Express

Your rewards total: $1,070 in the first year; $1,980 over two years

Your strategy: The AmEx Blue Cash Preferred card offers you 6 percent cash back on groceries (on up to $6,000 a year) and 3 percent on gas. To get the maximum rewards in those categories, Consumer Reports Money Adviser says to put all of your monthly grocery and gas purchases on that AmEx card. Put the rest of your charges on the Fidelity Rewards AmEx, which gives you 2 percent cash back on all of your other purchases. You can pocket that cash or put it into a Fidelity individual retirement account, a brokerage account or your family's 529 college savings plan.

The road warrior

Whether it's for work or play, you spend lots of time on planes and in hotels, and you want to earn rewards so your next globetrotting trip is free. Three-quarters of your credit card spending is in travel-related categories such as airfare, hotels, rental cars and dining, and you charge a total of $3,000 a month.

Your two best cards: Barclaycard Arrival World MasterCard with double points and PenFed Premium Travel Rewards American Express

Your rewards total: $1,550 in the first year; $2,420 over two years

Your strategy: The PenFed card and the Barclaycard let you use your points for trips on any airline. The PenFed pays an impressive 5 points back on every dollar spent on airfare. If you use it to charge flights but put your other travel expenses and the rest of your charges on the Barclaycard to take advantage of its travel reward of 2 miles for every dollar spent, Consumer Reports Money Adviser says you'll reach the reward totals noted above. The Barclaycard also gives you $400 worth of travel points if you spend $1,000 in the first three months.

You can redeem your Barclaycard points on such sites as Kayak, Orbitz and Travelocity. But the PenFed card requires you to use its agent to book your travel.

The small-business owner

You've got a wide range of expenses that include travel, dinners with clients, office supplies, communications costs and advertising. According to a 2012 analysis of more than 12,000 members of Shoeboxed.com, a service that lets small businesses track their spending, the average amount was $2,245 a month. You need cards that earn you cash that you can plow back into your business or provide travel points that you can use for your next business trip.

Your two best cards: American Express SimplyCash business card and Capital One Spark Cash business card

Your rewards total: $710 in the first year; $1,260 over two years

Your strategy: To maximize your rewards, Consumer Reports Money Adviser says to use the AmEx card for 5 percent cash back on your monthly spending on office supplies and telecom expenses (such as your phone and Internet service) and for 3 percent cash back on gas. Your other small-business spending should go on the Capital One card.